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One of the common issues facing businessmen and lawyers in the lease financing of complicated equipment such as aircraft, is how to impose an obligation upon the lessee to pay and segregate funds sufficient to assure aircraft maintenance expenses, while preventing these funds from being treated as property of a debtor and cash collateral within the meaning of Bankruptcy Code Section 363 (11 U.S.C. '363). If a lessee is asked in a written lease agreement to deposit, from time to time, contemplated amounts of cash by which to assure the lessor that certain long-term maintenance obligations will be funded and completed, or that rent will be paid, then there is a risk that these deposits might be treated as cash collateral and property of the estate. This subjects the lessor to the risk that the bargained-for cash set-aside funds, might, in a bankruptcy case context, not be available for the purposes for which they were originally intended. This article addresses a risk avoidance approach to that problem.
Over the past several years, courts faced with the issue of whether a lease is a "true lease" or a "disguised security interest" have been making it more and more difficult for lessors to have their leases confirmed as true leases. Through a process of focusing on economic reality instead of the intent of the parties and increasing the amount of residual value required at the end of a lease term, courts are creating a dilemma for the leasing industry. Certain segments of the equipment leasing industry are more severely effected by these changes than others.
It is an unfortunate consequence of the leasing business that leasing lawyers often become involved in bankruptcy matters. These attorneys, who rarely visit a courtroom, may think they don't need to worry about the rules of evidence. Yet evidentiary rules can provide critical protections. In a typical case or negotiation, lawyers create and circulate tremendous amounts of information ' much of which would be potentially damaging if obtained by other parties. To protect this information, leasing counsel need to be familiar with the rules of evidence and how courts have interpreted these rules. The case law interpreting these rules is not static; rather, it is constantly evolving in ways relevant to counsel who specialize in corporate insolvency. For example, a series of recent cases has explored the boundaries of the attorney-client privilege, examining such questions as, if counsel for a creditors' committee hires a financial expert, is the expert's work protected?
Recently filed cases in entertainment law, straight from the steps of the Los Angeles Superior Court.
Features
The U.S. Court of Appeals for the Seventh Circuit ruled that comic-book writer Neil Gaiman was joint owner of the copyrights in characters he created for the "Spawn" series published by Todd McFarlane. <i>Gaiman v. McFarlane</i>. The appeals court reached its decision by finding that Gaiman's claim wasn't time-barred.
Liability for personal injuries has long been a major concern for film and TV studios, given the history of injuries to crew members on production sets. Two courts recently issued rulings based on this concern.
Features
Depending on the circumstances and the law, parties on either side of an entertainment suit may ask a court for an award of attorney fees. Following are court rulings from recent months that deal with this and related concerns. In this and future issues, <i>Entertainment Law & Finance</i> will report on such relevant rulings in Attorney-Fee Updates.
M & A transactions in the television business can take many forms ' from a large-scale merger such as that recently proposed between Comcast and Disney to the acquisition of a cable TV channel or small local UHF broadcast station. In some cases, even the acquisition of a large and significant sports rights package can be viewed as rising to the level and complexity of an M&A transaction. What is seen on the screen is a function of the rights obtained by broadcasters. Not surprisingly, given the complexities of such transactions, unusual rights situations arise. Following are some that I have encountered in many years of doing deals in the TV business.
Features
Songwriters often form their own music publishing companies. If the publishing company sells the songwriter's compositions, what rights will actually be conveyed in the sale?